Boohoo to Buy Debenhams Brand Name But Not Its Stores

© Bloomberg A shopper carries Debenhams Plc bags in Gravesend, U.K., on Wednesday, Dec. 2, 2020. Most of England’s retailers are emerging from lockdown, with just over three weeks left until Christmas and the outlook for the industry looking far worse than before they closed their doors a month ago.

(Bloomberg) — Online fashion retailers Boohoo Group Plc and Asos Plc are seeking to rescue ailing U.K. retail brands like Debenhams and Topshop.

CONSTELLATION BRANDS, INC.

Boohoo said Monday it’s buying the Debenhams brand for 55 million pounds ($75 million). Separately, Asos Plc said it’s in exclusive talks with administrators of Philip Green’s Arcadia Group Ltd. to buy the U.K. retailer’s Topshop brand and other labels.

Boohoo said Monday it will acquire the Debenhams brands and its fashion sub-brands, including Manta Ray and Principles. The modest purchase price reflects the fact that Boohoo is not buying any of the retailer’s stock or keeping its 124 stores which, when the current U.K. lockdown ends, will only reopen long enough to sell remaining merchandise before closing again. Their permanent closure threatens thousands of jobs.

Boohoo’s last-minute swoop reflects the fast-growing online retailer’s desire to expand its offerings online beyond its main customer base of teenage and young twenty-something women. Debenhams also has a substantial beauty business online.

Debenhams is one of Britain’s best-known retail brands, which traces its history back more than 240 years but has struggled recently, weighed down by hefty rents and large property taxes of its stores. The retailer also faces the challenge of fierce competition from e-commerce in the U.K. as consumers increasingly shifting from shopping in stores to buying online. The trend has accelerated during the pandemic.

The deal also comes after Mike Ashley’s Frasers Group Plc failed to carry out a deal to buy the Debenhams brand, its website and some of the chain’s 124 stores. Earlier talks with JD Sports Fashion Plc to buy Debenhams for 300 million pounds also collapsed after the failure of Arcadia Group, whose brands Topshop and Dorothy Perkins have a dominant presence in Debenham’s stores.

Debenhams entered administration, a U.K. form of insolvency, in December and is currently in the process of being liquidated.

Asos confirmed the talks for the Arcadia brands after Sky News reported that it’s the frontrunner to buy Topshop from the insolvent company, which collapsed as coronavirus-related lockdowns compounded its woes. A price of more than 250 million pounds ($343 million) is being discussed, according to the report.

The talks also include the Topman, Miss Selfridge and HIIT brands, according to a statement. Any transaction would not include the Arcadia units’ stores, Sky reported.

Fashion retailer Next Plc and a range of other potential acquirers were previously reported to be interested in Topshop.

Any deal would be funded in cash, Asos said. There’s no certainty of a transaction, it added.

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